How Much Does It Cost to Run a Generator?
Updated 2026-08-16 · 6 min read
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Generator electricity is expensive compared with grid power. That's fine — you're buying availability, not economy — but it's worth knowing the number.
How do you calculate generator running cost?
Cost per hour = fuel consumption per hour × fuel price
Then, if you want cost per kilowatt-hour:
Cost per kWh = cost per hour ÷ kW delivered
A worked example
A 5,000 W generator running at half load (2.5 kW), using ~0.5 gal/hour of gasoline at $3.50/gal:
- Cost per hour: 0.5 × $3.50 = $1.75
- Cost per kWh: $1.75 ÷ 2.5 kW = $0.70/kWh
Compare with typical residential grid rates — often somewhere in the range of $0.12 to $0.30/kWh depending on the state. Check yours on the electricity rates by state page.
So generator power runs several times the cost of grid power. That gap comes from two things: a small engine converts fuel to electricity far less efficiently than a power plant, and you're buying fuel at retail.
Which generator fuel is cheapest to run?
Rankings shift with local prices, but generally:
| Fuel | Relative running cost | Notes |
|---|---|---|
| Natural gas | Usually cheapest | Metered, continuous supply |
| Propane | Middle | ~10% less generator output than gasoline |
| Gasoline | Usually most expensive | Highest output, shortest storage life |
| Diesel | Varies | Efficient, mostly larger units |
Propane's ~10% output penalty means you need slightly more fuel per kilowatt-hour than the energy content alone suggests — worth factoring in when comparing. See natural gas vs propane generator.
What does a multi-day outage cost in fuel?
The number that actually matters:
| Pattern | Hours/day | Gal/day | Cost/day at $3.50/gal | 3-day total |
|---|---|---|---|---|
| Continuous | 24 | ~12 | ~$42 | ~$126 |
| Heavy cycling | 12 | ~6 | ~$21 | ~$63 |
| Essentials only | 6 | ~3 | ~$10.50 | ~$32 |
For a 5,000 W generator at moderate load. Adjust for your own consumption figures — see how much fuel does a generator use.
Against the cost of a freezer full of spoiled food, a flooded basement, or frozen pipes, even the continuous column is cheap. The point of the table is that cycling roughly halves it, and cycling costs you almost nothing in comfort.
How do you work out the cost for propane or natural gas?
Gasoline is easy because it's sold in the same unit the spec sheet uses. The other two need one conversion each.
Propane is sold by the gallon and generator specs are usually in gallons per hour, so it works the same way — just remember propane carries less energy per gallon than gasoline (roughly 91,500 BTU against roughly 120,000), which is where the ~10% output penalty comes from.
Natural gas is the one that trips people up, because the generator is specified in cubic feet per hour while the utility bills in therms or CCF:
- 1 therm = 100,000 BTU
- Natural gas runs roughly 1,000–1,050 BTU per cubic foot
- So 1 therm ≈ 100 cubic feet ≈ 1 CCF
Worked through: a standby unit consuming 200 ft³/hour is burning about 2 therms/hour. At $1.50/therm (use your own bill — rates vary widely by region and season), that's $3.00/hour.
If that unit is delivering 10 kW, the cost per kWh is $3.00 ÷ 10 = $0.30/kWh — noticeably better than the portable-gasoline figure above, which is exactly why standby units run on gas where it's available.
Find your own rate on your gas bill: it's the per-therm or per-CCF charge, and you want the all-in figure including delivery, not just the commodity line.
What does it cost per hour once you include maintenance?
Fuel is the visible cost. Over a generator's life it isn't the only one.
- Oil and filters. Portable engines want an oil change on an hour interval — commonly measured in tens of hours, with the first change much earlier than the rest. During a long outage that's a change mid-outage, not after it.
- Spark plug, air filter, fuel filter. Cheap individually, regular over time.
- The engine itself. Small portable engines are rated in hundreds to low thousands of hours. Spread the purchase price across that and you get a real per-hour figure that often rivals the fuel cost on a cheap unit.
A rough way to sanity-check a purchase: divide the price by the hours you expect to get from it, and add that to the fuel cost per hour. A cheap generator run hard is frequently more expensive per hour than a good one, once the engine's life is counted.
How does that compare with a battery?
This is the comparison that actually decides a lot of purchases, and it's straightforward arithmetic.
A power station's cost per kWh delivered is:
Purchase price ÷ (usable kWh × rated cycles)
Take a 1 kWh LiFePO4 unit at $700, with about 0.85 kWh usable and a 3,000-cycle rating:
- 0.85 × 3,000 = 2,550 kWh over its life
- $700 ÷ 2,550 = about $0.27/kWh in hardware
- Plus the grid electricity to recharge it — at $0.17/kWh, call it $0.44/kWh all-in
Against roughly $0.70/kWh for portable gasoline, the battery is cheaper per kilowatt-hour and silent, fume-free and maintenance-free.
The catch is total energy, not price. That 1 kWh unit delivers about 0.85 kWh and then it's empty — the $0.27 figure only holds if you recharge it 3,000 times, which assumes a grid to recharge from. A generator delivers as much as you have fuel for. Batteries win on cost per kWh and lose on kWh available — which is why the pairing below beats either alone.
How do you reduce generator fuel cost?
Cycle rather than run continuously. Biggest lever by a wide margin. A closed refrigerator holds temperature for hours; a full freezer for much longer.
Match load to generator. Running a large generator lightly loaded wastes fuel per unit delivered.
Use an inverter generator if light loads are typical — the engine throttles down, and consumption follows.
Pair with a battery. Run the generator a couple of hours to recharge a power station, then run silently on battery. Cuts runtime, fuel, and noise together. See battery backup vs generator.
Reduce load. LED lighting, keep the fridge shut, skip resistive heating appliances — a 1,500 W space heater or kettle is an enormous share of a portable generator's output.
Standby generators: the other cost
Running cost isn't the whole picture for a standby unit:
Weekly exercise cycles consume fuel year-round, whether or not there's an outage. Modest per cycle, continuous over years — and configurable, since many controllers allow shorter or less frequent exercise. See generator exercise mode.
Annual professional service is a recurring cost, and often a warranty requirement.
The installation itself dominates lifetime cost for most standby owners — see standby generator installation cost.
Don't use it as routine power
Occasionally people consider running a generator to avoid utility rates. The arithmetic doesn't work:
- Several times the cost per kWh
- Engine wear measured in running hours
- Noise, continuously
- CO risk from a machine running constantly near a house
- Fuel logistics, permanently
Generators are for availability when the grid isn't there. For reducing routine energy cost, the levers are efficiency and — where it fits — solar. See how much does HVAC cost to run.
Where to go next
More in our generator and backup power guides.
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